Budget battle moves to Hill

WilliamL. Watts

WASHINGTON (CBS.MW) -- With President Bush's formal unveiling Wednesday of the 2002 federal budget outline, the battle over his 10-year plan for $1.6 trillion in tax cuts is truly under way.

Bush and senior administration officials said the budget, which would spend $1.96 trillion, and its accompanying 10-year projections clear plenty of room for tax relief.

"There is not more than enough room for the president's (tax) relief plan; there is vastly more than enough room," Mitch Daniels, head of the Office of Management and Budget, told reporters Wednesday morning.

Democrats insisted that the budget assumptions are too rosy and that the tax plan remains too large and weighted too heavily toward wealthy Americans.

On Capitol Hill, the Senate's top Democrat reasserted his party's objections to the plan and pointed to recent polls that suggest public support for tax cuts, when weighed against efforts to reduce the national debt and shore up Social Security and Medicare, is relatively soft.

'Too big'

"I honestly believe that the more people understand the numbers, the more they're inclined to say, 'this is too big. It's too much. It just doesn't work. The numbers are not good,'" said Senate Democratic Leader Tom Daschle.

Administration officials argued that the budget is aimed at reining in spending growth, and that long-term projections take an extremely conservative tack. As a result, there is plenty of room to provide the tax cuts, increase spending in targeted areas such as education and the military, pay down debt and shore up Social Security.

Borrowing a banking term, Daniels said the administration's long-term projections are "over-reserved against the unknown."

The outline was presented in a 202-page book entitled "A Blueprint for New Beginnings."

Bush outlined his budget priorities in a nationally televised speech to both houses of Congress Tuesday night. On Wednesday, he kicked off a two-day public tour designed to build support for the budget plan and tax cut.

"The surplus is your money, it's not the government's money," Bush told a crowd in Beaver, Pa., Wednesday morning.

House Republicans already have the ball rolling on Bush's tax cut plan, which was formally introduced earlier this month. The House Ways and Means Committee is expected Thursday to approve a measure that would implement a retroactive tax rate cut for all tax payers. See full story.

Presumably other components of the Bush plan, which House leaders have said they would take on in a piecemeal fashion, would quickly follow.

One for the money, two for the show

With a 10-seat GOP majority, the tax plan is likely to pass the House. But a more difficult battle awaits the evenly divided Senate.

So far, one Democratic Senator, Zell Miller of Georgia, has thrown his support behind the Bush plan. Meanwhile, two GOP senators, Rhode Island's Lincoln Chafee and Vermont's James Jeffords, have said they feel the Bush plan is too large. Other moderate Republican senators have also indicated they have reservations about the size of the Bush tax package.

"If the vote were taken today, George Bush would not pass his $2.5 trillion tax cut," Daschle said, referring to the Democratic tally of the tax plan's 10-year price tag.

Sen. Pete Domenici, chairman of the Senate Budget Committee, acknowledged that Senate Republicans don't have the votes to pass the Bush plan, but argued that they would be able to come up with a plan acceptable to the White House.

"I believe by the time we have a vote on the floor of the Senate, that we will be able to put a very, very good plan together, and the president will be proud of it and it will move in the direction that we're talking about here today," Domenici said.

Daschle indicated that Democrats are open to negotiation.

"At the end of the day, the most favorable outcome would be a compromise," he said. Democrats have called for $750 billion in tax cuts, with the remainder of the projected $5.6 trillion surplus reserved for new spending programs and debt reduction.

Bush and administration officials, meanwhile, have taken a hard line -- against Republicans calling for a bigger cut as well as Democrats seeking to shrink the plan -- on the $1.6 trillion figure.

In Tuesday night's speech, Bush repeated his Goldilocks analogy, telling lawmakers the size of the tax plan is "just right."

Daniels on Wednesday reiterated that stance. "There really is no debate left over size," the OMB director said.

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